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Friday, May 1, 2015

Samsung, Apple in DRAM, NAND, SSD Marketplace

Samsung benefits a lot in its relationships
with Apple from the consolidation of DRAM memory fabs. The consolidation keeps
DRAM prices high, while limiting the choice of Apple of vendors for its
products. While Samsung and Apple compete on cell phones, Apple still needs
Samsung for its processors and memory chips.

The article below discusses Samsung's
semiconductor production investments and it shows the preference of investing
more in DRAM than NAND -

"we invested around ..$9.36 billion in
memory...We have set DRAM and NAND production ratio to 7 to 3"

The article also shows the path Samsung is
taking this year in its transition from 2D to 3D on SSD, while mobile will use
2D NAND this year.

Summary: Samsung plans to
pump up to $10 billion into its semiconductor business, which drives the South
Korean tech giant's best-performing business division.

By Cho
Mu-hyun | April 30, 2015 -- 00:08 GMT (17:08 PDT)

Samsung plans to inject as much as $10
billion during 2015 into its semiconductor business, as unprecedented demand
continues to fuel growth in the company's best-performing division.

"Last year, we invested around 10
trillion won [$9.36 billion] in memory semiconductors," said Jeeho Baek,
senior vice president of Samsung's semiconductor division, during a conference
call with analysts. "We plan to maintain similar volume this year. We have
set DRAM and NAND production ratio to 7 to 3, but will manage this flexibly
depending on demand, going forward."

Samsung is increasing its production
capacity for memory chips. An additional line that will produce DRAMs is being
built at Hwaseong, its main hub for memory chip production in South Korea,
which will be completed by the end of the year.

The South Korean tech giant is planning to
start construction of a new plant in Pyeongtaek, South Korea, next month. It
plans to invest 15.6 trillion won in the new factory by 2017, the same year
that it is tentatively set to start production.

The world's second-largest semiconductor
vendor also plans to increase offerings that use 3D V-NAND. Only Samsung and
Japan's Toshiba have commercialised 3D V-NAND, which stacks cells vertically
within a chip to increase storage capacity in the same space.

Baek said the company will offer new 3D
V-NAND solid state drives (SSDs) aimed at consumers by the second half of the
year, as well as next-generation offers for enterprise-aimed goods.

Samsung cemented its leadership in SSDs
last year. According to market research firm IHS, Samsung Electronics held 34
percent market share for 2014, with revenues of $3.996 billion -- double that
of runner-up Intel, which posted $1.99 billion in the segment.

Last year, Samsung launched a variety of 3D
V-NAND SSDs for the enterprise. The senior vice president said talks with
clients were going smoothly, and he expected a surge in orders in the second
half of the year.

Samsung insiders said the firm has clinched
supply deals with Google and Amazon to supply SSDs for the latter's
datacentres. Samsung SDS, the IT service arm of Samsung Group, will also use
Samsung-made NANDs when building servers for clients.

Rival makers Toshiba, SK Hynix, and Micron
have just begun ramping up efforts to commercialise 3D V-NANDs, but are yet to
join the fray, which will likely contribute to prices being stable, allowing
Samsung to continue to reap high margins in the area.

For mobile clients, however, supply will
still be 2D NANDs. Samsung believes 2D NANDs are still more appropriate for mobile
set products, said Lee Myung-jin, head of IR, during the conference call.

"For high-integration,
high-reliability NAND flashes, we will use V-NANDs, and for mobile and consumer
products, we will use 2D NANDs and secure competence in both product lines,”
said Lee.

According to Gartner, the worldwide
semiconductor market grew 7.9 percent last year to $339.811 billion. Memory
segment grew 16.9 percent and led the growth, it said.

Samsung's contract chip business, called
System LSI, will likely enjoy a surge in profit as well. Its migration to
14-nanometer FinFet process ahead of rivals has helped it clinch new clients.

Samsung will produce chips for Apple,
Qualcomm, and Nvidia, both in 14-nanometer and 20-nanometer processes, for the
latter's next-generation chips, insiders have said.